Energy Transfer Equity announced Monday that it will buy Tulsa’s Williams Companies in a $37.7 billion deal. LP or ETC, an affiliate of ETE, will acquire Williams at an implied current price of $43.50 per Williams share. Williams’ stockholders will have the option to receive either Energy Transfer common shares or cash.
The companies put the deal’s value at about $37.7 billion, including debt and other liabilities.
Officials said Monday that The Williams Cos. had abandoned those plans, though it still controls 60% ofWilliams Partners.
Shares of both the companies fell 12 percent after the acquisition deal, which is marking the need for consolidation in the wake of the adverse conditions in oil field economics.
The firms will have a combined network of more than 100,000 miles of oil and gas pipelines crisscrossing the continent. Energy Transfer believes that the deal would result in better cash flows.
Energy Transfer Partners, L.P. (ETP) is a limited partnership in the United States engaged in natural gas operations. The Transco pipeline is expected to become more valuable when it is connected to Energy Transfer’s pipelines. On a different note, The Company has disclosed insider buying and selling activities to the Securities Exchange, Aube Sonia, officer (VP-Administration, Secretary) of Energy Transfer Equity, L.P., had purchased 800 shares on August 24, 2015.
“Energy Transfer makes sense”, said Peggy Connerty, a midstream analyst at investment firm Morningstar.
California Resources Corporation (NYSE:CRC) announced that its executives will be participating in the Johnson Rice Energy Conference on September 29th in New Orleans.
But the outlook for the USA economy looks brighter and oil supply there appears to be tightening with data estimating a drawdown of over 1 million barrels last week from the Cushing, Oklahoma delivery hub for US crude.
Williams (NYSE:WMB) is a premier provider of large-scale infrastructure connecting North American natural gas and natural gas products to growing demand for cleaner fuel and feedstocks.
Williams’ Chairman Frank T. MacInnis said that “after a comprehensive evaluation of strategic alternatives, including extensive discussions with numerous parties”, the company’s board had decided the latest merger bid was in the best interests of Williams’ stockholders. JPMorgan Chase & Co. raised their price objective on shares of Energy Transfer Partners from $72.00 to $73.00 and gave the company an “overweight” rating in a report on Tuesday, June 16th. The company has a market cap of $21,399 million and there are 1,054,678,000 shares in outstanding. It would get exposure over Energy Transfer Corp.
As a partnership grows larger over time, it is frequently required to pay more income to its parent company because of so-called incentive distribution rights.